Transaction value and misdeclaration in car imports: declared under-valuation allowed redemption fine, with reduced importer penalty and upheld intermediary penalty.

Imported cars were assessed on the proved transaction value where receipt, invoice and contemporaneous correspondence showed purchase at Dirhams 35,000 each, and the Department failed to disclose any evidentiary basis for a higher valuation. Absolute confiscation was therefore not justified on the facts, although the lower declared value and wrong model amounted to misdeclaration warranting confiscation with redemption on fine. The importer remained liable for the false declarations in the bill of entry, so penalty was sustained but reduced in amount. The intermediary's active participation in the misdeclaration to evade duty was established from the record, so the penalty on him was upheld.

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Issues: (i) Whether the imported cars were liable to be assessed on the declared or purchase price and whether absolute confiscation was justified on the facts; (ii) whether the penalty imposed on the importer and the penalty on the intermediary who facilitated the import were warranted.

Issue (i): Whether the imported cars were liable to be assessed on the declared or purchase price and whether absolute confiscation was justified on the facts.

Analysis: The available material showed that the cars had in fact been purchased for Dirhams 35,000 each, supported by the receipt, invoice and contemporaneous correspondence. The enhanced value adopted by the Department was not backed by any disclosed basis or supporting evidence. In the absence of proof to displace the transaction value, the purchase price was accepted as the assessable value. As the customs clearance permit covered that value, the cars were not liable to confiscation under the provision relating to import contrary to law, but the incorrect declaration of a lower value and wrong model amounted to misdeclaration attracting confiscation for improper declaration.

Conclusion: The purchase price was accepted as the assessable value, absolute confiscation was set aside, and redemption on payment of fine was directed instead.

Issue (ii): Whether the penalty imposed on the importer and the penalty on the intermediary who facilitated the import were warranted.

Analysis: The importer remained responsible for the declarations made in the bill of entry, and the misstatement of value and model justified the imposition of penalty, though the amount was reduced in view of the circumstances. As regards the intermediary, the statements, the surrounding record and corroborative material showed active involvement in the misdeclaration designed to evade duty, and the penalty was upheld as justified.

Conclusion: The importer's penalty was reduced, while the penalty on the intermediary was confirmed.

Final Conclusion: The appeals of the importers succeeded in part by securing release of the cars on redemption fine and reduced penalties, while the appeals of the intermediary failed and the penalties imposed on him were sustained.

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